FMC Could Soon Revisit Carrier Tariff Publication Requirements
Relieving ocean transportation intermediaries and vessel-operating common carriers from tariff publication requirements is “ripe” for Federal Maritime Commission consideration, FMC Acting Chairman Michael Khouri said in April 4 written testimony (here) to the House Transportation Maritime Transportation Subcommittee. Current law and FMC regulations require companies to publish rates that don’t have anything to do with actual market prices charged to shippers, as most ocean cargo movement occurs under terms of service contracts, according to Khouri. “Continuing to mandate thousands of tariffs be published that do not reflect real conditions in the market, and have minimal, if any, use by industry participants when negotiating service contracts, is a requirement and expense that regulated entities could be relieved of under the exemption authority provided to the Commission by Congress,” Khouri said.
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Khouri also told Congress that FMC’s Regulatory Reform Task Force, set up last month (see 1703140040), will establish a “definitive timeline” to move unneeded, burdensome and easily repealable regulations to a commission vote. “If I can achieve only one thing as the Acting Chairman of the Federal Maritime Commission, I would like our numerous stakeholders to view the agency’s regulatory regime as fair and to view the FMC as a global leader in terms of promoting a competitive and efficient ocean transportation system, with primary reliance on a free and open market place, and a minimum of government intervention and regulatory costs,” Khouri said.
FMC has strengthened the economic review process of newly filed alliance agreements, requiring tighter limits on the scope of agreements’ authority, and expanded quarterly reporting requirements, all of which should help ensure FMC’s ability to respond to any signs of anti-competitive behavior or “abnormal pricing trends,” Khouri said. At a time when what was 20 major shipping lines in 2015 will condense to an expected 13 by 2018, shippers, terminal operators and lessors are among those concerned that the larger alliances will garner unfair leverage in contract negotiations, according to Khouri. “Competition between companies remains vibrant and shippers continue to benefit from low rates” as trade volumes continue to grow sluggishly and competition between companies remains “vibrant,” Khouri said. Although U.S. exporters and importers have benefited from low prices associated with several years of vessel oversupply, these “imbalances will not last forever,” and a more “equalized and healthy supply/demand marketplace” will yield higher freight rates in the future, he said.